The city of Huntsville has spent a lot of money and staff time attempting to convince city taxpayers to OK its $128 million 'blank check' bond. Is that ethical?

City’s Slick Bond Flier: Advocacy or Information?

Your tax dollars are being used to talk up $128M bond

If you’re a city voter, you got one in your mailbox last weekend — a four-color, four-page flier printed on “slick” paper — with everything the city of Huntsville wants you to know about the $128 million bond issue on the Nov. 8 ballot.

Whether it’s information or promotion may be in the eye of the beholder. Under state of Texas law, no tax-collecting entity in the state is allowed to use taxpayer funds to advocate for bond propositions that have to be decided on by the voters. Yet, even a cursory read of the city’s flier shows that the city is putting out information to voters that only tells part of the story about the bonds.

And it is clearly using taxpayer money to do so.

Three ballot propositions, one for fire and safety facilities, one for city service facilities and one for water and sewer facilities add up to a staggering amount of $128 million in new debt. This is more than twice the amount of debt that the city has ever taken on at one time in its 181-year history.

When you add interest to that debt you find that the total pay-out on the debt over 30 years will be well over $200 million. That comes to something around $30,000 for each tax-paying Huntsville family.

In the past two months before the election, the city has published and mailed out fliers and postcards to the public, held a “State of the City” Town Hall-style meeting, and posted copious information on the city website.

All this talk about the reasons why the city thinks these bonds are required completely ignores the negative consequences to the voters if the bonds are approved.

In fact, the city claims that these bonds, and therefore these facilities, can be paid for with no increase in taxes or utility rates, as if the public can have these new facilities for free. All they have to do is keep paying taxes and utility rates at the current level.

But that claim is based on several high-risk assumptions. Among them, it assumes interest rates will remain at the current historically low levels, something that responsible economists, including those at the Federal Reserve, are not willing to say. In fact, most say that interest rates are expected to increase, perhaps dramatically, in the near future.

It also assumes construction costs will remain about the same over the several years that it will take to design and build these facilities. That clearly is high risk.

This combination of potentially higher interest rates and higher construction costs means that the cost of these facilities to the taxpayers could be much higher than now estimated. That, in turn, means that the taxpayers would have to pay more, possibly much more, for these facilities. This means taxes would have to go up.

So if this flier is “information” and not “advocacy,” why ignore the risks of record-debt bonds in taxpayer-funded “public information”? You should be able to trust the city to give you a 360-degree look at a decision this big — to assume record debt for “free” for 30 years. But their tactics seem to come straight off a used car lot full of 1972 Ford Pintos. Now that’s salesmanship!